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At last week’s investor day in Paris, Adecco revealed that the summer months had been difficult with revenue falling by -4.5% in July and August. But more issues the staffing firm is dealing with have since come to light.
Speaking to investors, CEO Patrick De Maeseneire said that high unemployment rates are here to stay while at the same time there will be an increasing skills gap where jobs will simply remain unfilled.
But he said that governments in Europe have recognised the need for labour flexibility with countries such as Italy lifting restrictions on temporary agency workers.
For Adecco, Italy “has always been one of the best countries for growth and profitability,” he told investors. The CEO welcomed the labour market reforms and said they were a positive step towards “liberalising the jobs market.”
But he warned of a high youth unemployment rate in the region. “If we look at youth unemployment rates we see that we are losing a generation in southern Europe,” something he called a “crime.”
Mr De Maeseneire also spoke of an environment of uncertainty in France, its largest single market. In an interview with the newspaper Finanz und Wirtschaft, he said that “the problem in France is the insecurity surrounding the development of taxes. In this climate, companies won’t invest.“
In France, Adecco is reducing the number of its branches by 15%, axing over 500 full-time staff. The firm is also expecting to make €45 million in cost savings by merging Adecco with its Adia brand.
The staffing company also announced plans to increase its presence in emerging markets, where it aims to raise revenue from currently 9% to 13% in the next three years. This will be part of Adecco’s target to reach an EBITA margin of over 5.5% midterm in the next two to three years.